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Understanding Health Disparities Across Education Groups

  • Dana Goldman
  • Darius Lakdawalla

Better-educated people are healthier, but the magnitude of the relationship between health and education varies substantially across groups and over time. We undertake a theoretical and empirical study of how health disparities by education vary over time and across the population, according to underlying health characteristics and market forces. One surprising implication of the theory we develop is that health disparities actually increase as the price of health inputs falls. Therefore, government subsidies for health care research or even universal health insurance may worsen health inequality. Moreover, technological progress in health care will tend to raise inequality over time. The theory also implies that health disparities will be larger for sicker, older and more vulnerable groups. The first prediction is consistent with significant expansions in health disparities over the last thirty years in the US. The second is consistent with observed patterns in the National Health Interview Survey, the Medicare Current Beneficiary Survey, and the Framingham Heart Study. The returns to schooling are twice as high for the chronically ill and for those out of the labor force, and they tend to rise with age.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8328.

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Date of creation: Jun 2001
Date of revision:
Handle: RePEc:nbr:nberwo:8328
Note: HE
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  1. Kenkel, D.S., 1988. "Health Behavior, Health Knowledge, And Schooling," Papers 10-88-3, Pennsylvania State - Department of Economics.
  2. Muurinen, Jaana-Marja, 1982. "Demand for health: A generalised Grossman model," Journal of Health Economics, Elsevier, vol. 1(1), pages 5-28, May.
  3. Selma J. Mushkin, 1962. "Health as an Investment," Journal of Political Economy, University of Chicago Press, vol. 70, pages 129.
  4. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr.
  5. James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
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